Yes, water rate hike, bonuses are linked

San Diego Councilman Carl DeMaio’s recent denunciation of the city’s latest proposed water rate hike didn’t win him many fans at City Hall, where it was depicted in some quarters as grandstanding that ignored California’s water-supply crisis.

We don’t deny that DeMaio has a taste for attention nor dispute that the vast long-term increase in water rates around the state is mostly driven by shortages.

That said, the Rancho Bernardo Republican is right to wonder why rates should go up a dime before massive changes are made in a bizarre program in which huge numbers of city water and wastewater department employees are given bonuses for doing their job well – the only such incentive-pay program offered by the city.

In February, City Auditor Eduardo Luna issued a report on the Bid-to-Goal Program, which paid $28 million to water and wastewater employees from 2005 to 2008 for finding ways to make water operations more efficient. Luna found severe flaws. Some of the worker-driven changes that city officials claimed resulted in savings turned out to include follow-throughs on federal mandates. Internal reports also often didn’t substantiate that performance goals had been met or properly track who received payouts and for what amounts.

This is all damning enough. But perhaps worst of all was the jaw-dropping fact that for the period surveyed, 90 percent of employees received the annual bonuses, which were capped at $6,500. When such an overwhelming majority of a department gets annual bonuses, that’s not an incentive program. It’s a compensation program.

After Luna’s audit, city officials made a series of changes to ensure the program had more transparency and was more compliant with basic accounting practices.

Last week, an independent assessment of the revamped version of Bid-to-Goal turned up more embarrassing details. One of the dozens of goals that could help yield bonuses was less use of city cell phones. Another was holding “a water conservation day mini-festival” in each City Council district. Another was a vague call to establish a “comprehensive photographic inventory” of water facilities.

However, most of the goals were judged worthwhile by the independent assessment, which was generally positive about Bid-to-Goal. The program was subsequently praised by interim city public utilities chief Alex Ruiz.

But we think the worthwhile goals cited in the report should be pursued by water officials even without accompanying employee incentives. There is no reason that in one large city department, virtually all fairly paid public employees with lavish pensions should get extra pay for doing a good job. This is especially so given that many of these same employees routinely receive annual “step” raises pretty much just for accumulating years on the job.

Meanwhile, even as these dubious bonuses were defended, city water customers were told this month that the city has had no choice but to hike water rates by 67 percent since 2007.

On Nov. 15, the City Council will hold a public hearing on the latest rate hike of 5 percent. If the hike is adopted without the council first taking decisive steps toward ending the city’s indefensible water bonus program, outrage should ensue.

Maybe scrapping Bid-to-Goal would have little effect on water rates, but any relief is welcome. It’s time city leaders figured out that the program is an anachronism from another era – one that San Diego must finally leave behind.